Dollar Weakens Against Yen After US-Japan Market Intervention

The US dollar weakened sharply against the Japanese yen on Monday after President Donald Trump and Japan's finance minister confirmed that both countries had intervened in markets.

Before last week, the dollar was trading above 163 yen, but after regulators were suspected of stepping in, it fell below 160 yen. The dollar then dropped to nearly 155.20 yen on Monday morning before recovering slightly to around 156.75 yen by late afternoon Tokyo time.

The intervention is seen as a rare move, with Neil Newman, managing director and head of strategy at Astris Advisory Japan, noting that such overt acknowledgment of market intervention is usually only seen after major events like the 2011 earthquake and tsunami disaster in northeastern Japan.

Trump explained that the US helped out because it has a good relationship with Japan and wanted to support its ally. He added that the intervention was also beneficial for the world economy, making US-made goods more competitive and potentially boosting exports to Japan.